China’s Juneyao Air saw its first-quarter 2019 profits slide 7.5% year-over-year (YOY) to CNY400.4 million ($59.6 million), as operating costs continue to increase.

The Shanghai-based airline earned CNY432.6 million over the same period last year. After deducting non-recurring items, its first-quarter net profit was CNY326 million, down 20.2% YOY.

However, operating income increased by 14.5% YOY from CNY3.6 billion to CNY4.1 billion.

Operating costs rose 19.3% to CNY3.7 billion. A significant contributor was its “interest expenses,” which nearly tripled to CNY75.3 million. Other new costs added to the balance sheet was a research and development expense, taking up CNY1.5 million.

Chen Chuanren,